As the Gap with Big Tech Widens, South Korean Platforms Need to Change Their "Regulatory Framework"

[Financial News] As the focus of artificial intelligence (AI) competition shifts from technology and model development toward "value creation" that generates actual revenue and productivity, the importance of platforms is growing. With the gap between global Big Tech companies and South Korean platforms widening, experts have called for a policy shift that views platforms as a key foundation for AI growth and supports expansion and innovation.
The Korea Internet Corporations Association, together with the Digital Platform Policy Forum and the Korean Association of Information and Communications Law, held a seminar titled "Strategic Tasks for Strengthening the Competitiveness of the Platform Industry" at Post Tower in Jung-gu, Seoul, on the 22nd.
Kyung-Sun Lee, a research fellow at the Korea Information Society Development Institute (KISDI), gave a presentation titled "The Value and Policy Direction of Platforms in the AI Era." Lee emphasized, "AI competition is moving beyond technology development and investment into the 'value creation stage,' which generates actual revenue and productivity. Even if they are not at the forefront of model competition, platforms can secure new competitive advantages through service innovation and industry-specific applications."
Lee said platforms would play a key role in connecting the practical use of AI technology with industrial growth. "Platforms are channels that connect AI technology with the real-world needs of users, businesses and industries, translating those needs into market value," Lee explained. "They are growth engines that create a self-sustaining growth structure through demand for AI applications and feedback data, including model improvements and reinvestment in infrastructure."
Meanwhile, the gap between global Big Tech companies and South Korean platforms is widening. According to Lee, the market-capitalization gap between Alphabet and Naver grew from approximately 27 times in 2020 to approximately 175 times this year. The gap between Apple and Kakao widened from approximately 71 times to 426 times over the same period. Lee proposed, "The growth of domestic platforms and the securing of global competitiveness must be reestablished as the core goals of platform policy. Platform policy should also shift beyond individual regulatory issues toward a policy coordination system that comprehensively considers innovation, industrial competitiveness, user protection and fair competition."
Others also called for platform regulations to be designed flexibly in line with technological and market changes. Seon Ji-won, a professor at Hanyang University School of Law, said in a presentation titled "Current Regulatory Issues in the Platform Industry and Ways to Improve Them," "Controls intended to protect users should not reduce services or discourage development from an industry perspective. Blanket rules governing requirements and effects are highly likely to impose enormous enforcement costs or block the innovative paths available to platforms."
Seon added, "It is necessary to consider the pace of technological development, the extent to which substantial and specific risks emerge, and the possibility of controlling them independently. Regulations should be designed in a way that does not block the potential of platforms to lead or facilitate the AI transition."
Seon argued that instead of imposing blanket regulations, the government should adopt a self-regulatory approach in which platforms and industry establish rules on fair trade, user protection and data use, then continuously refine them by incorporating feedback from users and other stakeholders. Seon added, "Continuous oversight and feedback on various issues are needed to improve welfare while ensuring users' right to choose. Feedback on technical matters can be provided more actively within a self-regulatory framework."
[email protected] Choi Hye-rim Reporter